1.1.5 Relation of Mortgage to Obligation Secured; Assignment and Release of Mortgage.

• Jurisdiction: Arizona

A mortgage is not a debt, but is merely incidental to the debt as security. Therefore, when the obligation for which the mortgage is given as security is at an end, the mortgage itself is extinguished. See Hill v. Favour, 52 Ariz. 561, 84 P.2d 575 (1938); Weatherford v. Adams, 31 Ariz. 187, 251 P. 453 (1926). “[A] mortgage is meaningless without an underlying indebtedness. Best Fertilizers of Arizona, Inc. v. Burns, 116 Ariz. 492, 570 P.2d 179 (1977); Merryweather v. Pendleton, 90 Ariz. 219, 367 P.2d 251 (1961); Weatherford v. Adams, 31 Ariz. 187, 251 P. 453 (1926).” Pioneer Annuity Life Ins. Co. v. Nat’l Equity Life Ins. Co., 159 Ariz. at 155, 765 P.2d at 557.

Similarly, a mortgage does not create or represent a lien on the property if the underlying indebtedness is invalid or void. In re Janis, 125 B.R. 274 (Bankr. D. Ariz. 1991). However, “[p]reexisting indebtedness will support the giving of a mortgage to secure its payment. See Hackin v. Pioneer Plumbing Supply Co., supra; McCallister v. Farmers Dev. Co., 40 N.M. 101, 55 P.2d 657, 660 (1936).” Id. The Pioneer court, drawing analogies from equitable mortgages, also noted that a mortgage need not necessarily include a description of the secured obligation. A trust deed or mortgage may secure future advances under a “dragnet clause.” It has been held in Arizona that an “optional” advance has priority over a recorded subsequent lien where the first lien holder has no actual notice of the intervening lien. LaCholla Group, Inc. v. Timm, 173 Ariz. 490, 844 P.2d 657 (App. 1992).

The liability of the maker of a note is discharged when the maker “[r]eacquires the instrument in his own right” (A.R.S. § 47-3601(C)(1)). The mortgage securing such a note is also discharged. Puz v. Martin, 161 Ariz. 380, 778 P.2d 1276 (App. 1989) (citing Best Fertilizers, Inc. v....